1. MANAGING THE OFFER PLAYSTATION REPORT 2013
CHRISTIAN DY
3129634
MANAGING THE OFFER
MEL GODFREY

2. Introduction
This report will be discussing recommendations for Sony PlayStation. These will be
based on the market in which PlayStation operates (video gaming). It will also be
based on recommendations in a presentation that was delivered in class, in depth
research in which has been carried out and also including theories.
Market Definition
The market can be subdivided into three categories. These are the video gaming
software, which include the physical and digital sales of games for both static and
handheld consoles. We also have video gaming which the actual hardware of both a
static and handheld console and last is the video gaming accessories, which may
include headsets, controllers and console/pad stickers. These three categories also
include casual gaming in which are downloaded onto phones and tablets.
Company Background
As posted on the Sony’s official website, their mission statement reads “The Sony
Group is primarily focused on the Electronics, Game (such as PlayStation) and
Financial Services sectors. Not only do we represent a wide range of businesses, but
we remain globally unique. Our aim is to fully leverage this uniqueness in
aggressively carrying out our convergence strategy so that we can continue to
emotionally touch and excite our customers”. (Sony.net)
FirstRecommendation
The first recommendation in which PlayStation should carry forward would be to
reach out into the mobile phone market. This can be done through new product
development. According to Paul Trott’s Innovation management and new product
development (fifth edition, 2013, pg. 430), new product development can be divided
into three categories. This is new to the world products, new product lines and
additions to product lines. In terms of where PlayStations potential mobile phone
would fit into this category it would be new product lines as it is not new to the
market but new to the firms existing product line. (Appendix A and B talks about
NPD and S.W.O.T)
Reaching out into the mobile market will not only increase Sony PlayStation’s
product line but also give a competitor advantage over their main rivals Xbox in
which Sony have already taken advantage of with their other products such as the
PSP vita and PSP GO. Although this does not pose a direct competition to Xbox as
these can be seen as a phone with PlayStation capabilities, it can eat away Xbox’s
overall share in the gaming market. Xbox only sell home video gaming consoles, from
the first ever Xbox, to the Xbox 360 and Xbox one, Microsoft (Microsoft own the
Xbox brand) haven’t branched out into other sectors of the gaming market in terms
of handheld consoles. This may be due to the vision Xbox have, of having an “all in
one games and entertainment system” and do not have any other product apart
from the Xbox 360 and recently developed Xbox one.
In terms of reaching out into the mobile phone market Sony have the option to build
the PlayStation technology onto an existing phone in which they can use the

3. PlayStation brand to market the phone. A good example of this would be the N-gage
that was created by the Nokia brand. The base of the phone was similar to the Nokia
3650 with the S60 interface. The N-gage phone had the same capabilities of the
then, up to date software such as Bluetooth connectivity, multimedia messaging
(MMS) and WAP over GPRS. It also had better gaming graphics thanks to the n-gage
software, which was installed on the phone and was the only phone to have an
online gaming platform known as ngage arena. It proved to be a major hit with
consumers, which 2004 have sold 1.4 million products worldwide (according to IGN)
after only being launched the year before. However the hit also proved to be short
term as the ngage ceased production in 2010. The launch price of the N-gage, which
was supposed to rival Gameboy advance, was roughly £182 (converted from current
US Dollar), whereas the Gameboy advance cost £60. We can see that Nokia priced
the N-gage at a high price compared to the Gameboy. This may be due to the fact
that the N-gage was the first of its kind. Sony may not be able to take the same
approach
Sony have already had previous experience in the phone market with the
partnership of Swedish telecommunications Equipment Company Ericcson which
then led onto buying out Ericcson shares in the company. Sony’s phone company
now operates under the name of Sony Mobile Communications. Sony has never
attempted putting their PlayStation brand onto one of the Sony phones and now is
the time to do so. In 2012 the average monthly expenditure on telecommunication
services prices was 58.2% for mobile phones and data (See appendix E). This means
that consumers see their mobile phones as a priority over fixed voice and fixed
internet bills (fixed in terms of home calls and internet), Sony can exploit this by not
only increasing their product phone range by introducing PlayStation features onto
one of their existing phones but also gives them a competitor advantage as they
bring something different to the market.
SECOND RECOMMENDATION
Titled games that were exclusive to Sony PlayStation should be sold on app stores
and created by Sony’s own developers. This can be through a range of different app
stores including the android app and apple’s app store. According to Apple’s official
website the number of apps which were downloaded in 2012 were 20 billion and a
total of 40 billion apps have been downloaded out of the 775,000 apps worldwide.
Ten years since the apple app store has been opened there are just over 237,000
game apps, which represent 18% of the total app store. It is also the number one
category in the app store with the most amounts of apps in a category. What this
means for a company like Sony PlayStation is that gaming has become an important
aspect to the consumer and is popular for everyone as they can play games on the
spot or in their spare time. Sony should capitalize on this statistic by producing
games exclusive to their business.
Casual gaming is becoming increasingly popular and in October 2013 had increased
from 176,000 to 181,000 game apps in November 2013 in terms of active apps (See

4. Appendix C). This shows that there is a potential growth in app stores for Sony to sell
their titled games to developers or even use their own developers to make apps for
phones and tablets. The other major app store is the play store, androids official app
store. The total number of apps which android have are 975,000 according to their
official website (android.com). Distismo reported in 2012 that game accounts for
66% of revenue from apps (Appendix D), and for a company like Sony who produces
games can see that they are able to benefit from the app stores having high revenue
in the app store. It can benefit the company as Sony deals with gaming and it shows
that there is an established and popular market for game apps. In the U.K market the
popularity of games in Apple’s App store is eighth in the world showing that there is
a demand for casual games.
Not only are there only two major app stores, there are now several different app
stores to choose from. Distimo.com tracks the usage of apps and gives numerical
data show that there are 9 app stores. What this means for a company like Sony
PlayStation is that they are able to commercialise their exclusive title games app to a
mass.
In terms of creating apps in the 2012 budget the government announced provisions
to introduce tax relief for video games production. This is beneficial for Sony as they
are able to benefit from reduced development costs and as a result maybe increase
the amount of investment into the actual research of game development for apps.
Third Recommendation
Marketing their product so that consumers view their product not only as a gaming
console but also a complete entertainment hub.
In order for consumers to view the Sony PlayStation game console as a complete
entertainment hub they will have to change the way consumers view their product. .
Once an attitude towards a certain product has been established it is hard to change
this idea of what consumers may have about Sony PlayStation.
So rather than change the consumers perception of what Sony PlayStation is about,
Sony should not change their image to their consumers but use this as a base to
develop consumers understanding about their product further. A recent report from
forbes.com stated that the upcoming PlayStation 4 (PS4) was marketed towards the
“core gamers” but also stated that Sony are making the right steps to make sure that
Sony will change the way we consume non-game media. In order to compete with
Xbox One’s statement of being the complete games and entertainment systemPS4
will have a new Internet TV service. The previous PS3 did have TV services but was
never one of the key aspects talked about when being marketed. Furthermore, Sony
has also announced that a variant of the PS Vita can be used in addition to the PS4.
The way that Sony are now marketing their products can now be seen as being a
complete entertainment hub. Using the PS Vita TV and PS4 they are now fusing their
products together to have dual purposes, which in the eyes of the consumer is an
effective way of showing that they want to bring a complete entertainment hub. As

5. a result this can improve the growth of the product and the company. It is an
improvement of the previous product (PS3) and in terms of growth will be able to
give a competitor advantage and possibly stay ahead of the competition. Like most
consoles the planning of the PS4 was before the launch at the E3 (Electronic
Entertainment Expo) where developers showcase their consoles and games.

6. APPENDICIES
Appendix A
The first step of new product development (NPD) is being able to generate the idea
and Sony would be to carry out an S.W.O.T analysis (See Appendix B). Generating the
idea can come from a variety of sources whether it is internal or external. An internal
source may be employees who already work for the company or using data, which
has been previously collected by the company. A way of external factors would be
through consultants and market research about the environment that Sony works in.
The next stage of NPD would be to screen the idea. Screening the idea involves going
through variable ideas and picking the most viable one in terms of a variety of
questions such as whether it will be able to be developed further, will it be able to
compete in the market and most importantly will it bring revenue to the company.
The third stage in NPD is concept development and testing. At this stage the
company will start physically creating the idea and test it. As Sony already has a
phone range they may be able to incorporate this with their PlayStation brand. An
example of this may be using various phone ranges and testing PlayStation features
with it. This can include PlayStations game card into their phone for better gaming
graphics to the user interface they have on the PlayStations. The next process is
business analytic. These will include collecting data over a period of time in term of
metrics that will provide valuable criticism. The next stage will be beta tests. For
PlayStation and their parent company they should do a mixture of tests that include
discussion groups for both gamers and phone users to get an opinion on the actual
product. These discussion groups will be valuable as it allows them to tweak some
aspects of their product to make it more suitable to the consumer. Discussion groups
are a good way of seeing what consumers think of the product, which will help
towards making the final product. Step six of the NPD is the product development.
Now is where the product will start to form and start putting the idea into practice.
This will include all aspects of the business including the marketing team, which will
market the product, the financial team will sort out the financial accounting of the
product and the product development team will start to make the final product (in
this case the phone). The next step is commercialization. The product has now been
introduced into the market and customers are purchasing the product. The business
has to make sure the distribution channels are in line with what the business needs
and wants and the advertising department will have to make sure the product stays
in the minds of the consumers.
Appendix B
A key strength of the company would be that they have prior knowledge of both the
phone market and games console market. This is not only an advantage due to the
fact that they have knowledge of both markets but also have the capability of
producing a gaming phone in which they do not need to go else where for expertise.
This is a huge advantage in itself as Sony are able to do their own R & D in house
rather than source different areas in which they may not have the expertise in, they

7. can use both their mobile and gaming departments to produce a gaming phone of a
high caliber. A weakness of Sony producing a gaming phone would be that having a
phone with a high gaming integration systemwould run the risk of draining the
battery out too quickly as the graphics card and other internal hardware would use
too much power. Thus questioning whether the battery life performance will be able
to perform on a daily basis with the phone carrying out other tasks than playing
games. An opportunity for Sony would be that they could possibly create a niche
market. This is because of whom they target the phone to. A casual gamer will not
spend hours and hours playing games on their phones and will use most features of
the phone, in comparison to serious gamers who play games at a high level and
possibly use their phones more to do with ‘leveling up’ in games rather than use a
phones other features. As a result of identifying whom the target market will be the
barrier of entry into a phone market. Barriers of entry in a mobile phone market
would be the massive players who already dominate the market. Apple and Samsung
have taken over the majority of the phone market; as of September 2012 apple have
a sales turnover of 982,298, and Samsung a sales turnover of 2,142,25. (Mobile
Phones,2013, Key Note)
Appendix C
This graphs represents active applications on Apple’s app store in the U.S. Although
this shows a different demographic to the UK it shows the sheer amount of active
users using different apps and the market which is growing at a healthy rate.

8. Appendix D
Appendix E
Appendix F

9. REFERENCES
Books
Paul Trott. 2013. Fifth Edition. Innovation management and new product
development PG.430
Journals
Ian Barclay, Mark Benson. 1990. New Product Development. Leadership &
Organization Development. PG.24-30. Vol. 11. No. 6. ISSN: 0143-7739
Reports
Katie Hughes (July 2013) Video Gaming. Second Edition. KeyNote.
Leah Trutt (July 2013) Mobile Phones. Ninth Edition. Keynote
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